There’s plenty of good news circulating today and helping to push markets upward. Wells Fargo reported a first quarter profit, and America’s trade deficit fell to its lowest level in nearly a decade. In fact, neither piece of information is that good. Wells profit may be have been boosted by some generous payments from AIG, and the trade deficit decline is a function of us exporting our pain to struggling economies in Europe and Asia. Still, it’s enough to move markets. Profitable banks can get busy earning their way out of the hole they’re in, and a declining deficit will reduce the drag net exports will place on first quarter output numbers (and move us toward a more balanced economy).

But there’s a problem embedded in the data. The trade deficit in February was about $26 billion, but the non-petroleum deficit was less than half that. Take out oil, and we’re dangerously close to a trade surplus. But as Calculated Risk notes, the import price of oil was $39.22 in February, down a tad from the level in January, and down an extraordinary amount from the level last summer. But today’s news was good, and helped boost expectations for the path of economic growth. Unsurprisingly, then, oil is up along with everything else, trading over $52 per barrel where just a few days ago it was at $48.

There are several implications here. One is that oil prices are extremely sensitive to economic growth — the more so since low recent prices and the credit crunch served to disrupt a lot of exploration. As the global economy recovers, so too will oil prices, and fast. That increase is going to cut the legs out from under a recovery; a rise in oil prices is like a tax increase, which is contractionary. And if we nonetheless manage to grow through the rise, the increase in prices and oil demand will expand the trade deficit once more.

I don’t think it’s that hard to work around these issues. We could pass a substantial gas tax increase now to take effect in two or three years. In expectation of the increase, consumers would purchase more fuel efficient automobiles, potentially boosting auto sales and reducing vulnerability to high oil prices. And I’m sure I don’t even need to say that a program of rapid expansion of transit and passenger and freight rail capacity, funded immediately by deficit spending and after recovery by gas and congestion taxes, would kill multiple birds with one stone — providing stimulus, facilitating structural shifts, and reducing exposure to rising oil prices.

Rising oil is a threat. It will slow or kill recovery, and depending on how the Fed reacts it could generate uncomfortably high levels of inflation. And it’s not like getting off of oil is in anyway counter to long-term goals; climate change perpetually looms in the background. Let’s see some attention paid to this.